Netflix Is Buying Warner Bros. Discovery for $83 Billion

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Netflix and Warner Bros. Discovery have reached a massive agreement: Netflix is acquiring Warner Bros. Discovery’s studio and streaming services for $82.7 billion. After weeks of competition, this deal could dramatically change the entertainment industry, but it still needs approval from regulators. If approved, the deal, which involves both cash and stock, is expected to be finalized by next fall. Before that happens, Warner Bros. Discovery will separate its cable channels – including CNN, HGTV, Food Network, and Discovery – into a new, independent company.

Netflix entered the competition to acquire Warner Bros. Discovery relatively late, in late October, but ultimately won out over bids from Comcast (owner of Universal Pictures) and Paramount (led by David Ellison with significant financial support from his father, Oracle CEO Larry Ellison). The deal, which surprised Hollywood with how quickly it happened and its massive scale – valuing Warner Bros. Discovery at $72 billion, considerably more than its current market value of $60 billion – marks Netflix’s largest acquisition ever. Importantly, Warner Bros. Discovery’s traditional focus on releasing movies in theaters clashes with Netflix’s core business as a streaming service.

During a recent call, Netflix co-CEO Ted Sarandos acknowledged some were surprised by the company’s decision to acquire another business. He explained that Netflix has historically focused on creating its own content rather than buying other companies. However, he emphasized that this acquisition is about continuing to improve and invest in compelling stories for viewers, ultimately making Netflix even stronger in the future. He believes combining Netflix with Warner Bros. will achieve this.

Recently, as Netflix aimed to acquire the historic studio behind iconic films like The Wizard of Oz, Casablanca, and The Lord of the Rings, it encountered resistance from both within the Hollywood film industry and in Washington D.C.

A group of film producers sent a letter to Congress on Thursday warning that Netflix buying Warner Bros. would be devastating for movie theaters. They fear Netflix would eliminate or drastically shorten the time movies play in theaters before becoming available on streaming, effectively ending the traditional theatrical release window. The producers believe this would give Netflix too much power over which films get shown in cinemas, leading to lower profits for theaters and potentially fewer movies on the big screen.

On Thursday, Paramount’s legal team sent a letter to the CEO of Warner Bros. Discovery, raising concerns about how fairly the company was handling its sale process. The letter stated that Warner Bros. Discovery seemed to have stopped acting in good faith and was instead pushing for a deal with only one buyer, potentially harming its shareholders.

Because Larry Ellison has historically been a significant donor to the Republican party, and Donald Trump publicly called both Larry and his wife supporters and friends, many believed Paramount had an edge in the competition to acquire a streaming service. Recently, Republican politicians have been taking a closer look at the potential merger of Netflix and Warner Bros., raising antitrust concerns. Congressman Darrell Issa of California, for example, sent a letter to the Justice Department suggesting that a combined Netflix-Warner Bros. would likely face legal challenges due to its dominant position in the streaming market.

The Trump administration has used the Federal Communications Commission in the past to target those the president saw as opponents, like pressuring ABC to cancel Jimmy Kimmel and threatening Disney, which owns ABC. It’s currently unclear how much control the White House intends to have over the deal with Netflix.

To make the agreement more appealing, the deal announced on Friday includes a massive penalty: if the takeover by Netflix falls through for any reason, they’ll have to pay Warner Bros. Discovery $5.8 billion. The news caused quite a stir in Hollywood, but Warner Bros. Discovery’s CEO, David Zaslav, emphasized the positive aspects. He stated that the deal brings together two leading entertainment companies to deliver even more of the content people enjoy.

Consumer reaction, meanwhile, was more muted.

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2025-12-05 19:54